We now know who will replace Ingenix as the nation’s provider of usual, customary and reasonable (UCR) data; we also know when (by the end of 2010). As to the how, that’s a bit less certain.
Syracuse University will be the home of a non-profit data house’ to be called FAIR Health (Fair and Independent Research Health); Cornell, Upstate Medical Center, SUNY Buffalo, and the University of Rochester will also contribute (got to spread the largesse around). (full disclosure – Syracuse is my alma mater)
The new entity will be funded at least in part by the $100 million NY Attorney General Andrew Cuomo has gotten in settlements from Ingenix’ UCR database customers. In addition to Cuomo’s successes, Ingenix’ parent company, UnitedHealth Group paid $350 million earlier this year to settle a class action suit, and other legal action is continuing which Cuomo expects to add to the $100 million total. The cash will be used to develop the database and set up a mechanism to deliver data to payers and consumers via a website. This last is a great idea – providing health care consumers and providers with access to UCR data should help promote transparency and enable price comparisons by consumers and price competition by providers.
FAIR will be headed up by SU Professor Deborah Freund, an expert in health economics, Distinguished Professor of public administration and economics in SU’s Maxwell School and Senior Research Associate at Maxwell’s Center for Policy Research. Dr Freund has a wealth of experience on the academic side of health policy and economics and has published on a wide range of topics in those fields.
I’ll see if I can stop in for a chat when I’m back up on the Hill in January for another alumni meeting.
The timetable seems…aggressive – there’s a lot to do to avoid some of the problems that plagued Ingenix’ MDR and PHCS databases; non-existent quality control on source data and inadequate volume of data in some areas are just two of the problems that led to the settlements. While Freund et al at FAIR may want very much to provide comprehensive, clean data that covers all procedures delivered by all providers, they don’t control the quality, accuracy, and consistency of the data collected by health insurance companies and other payers. And after the Ingenix debacle, they sure want to be absolutely positively comfortable with their data before they release it to the public.
My guess is the website and initial data will be up and running by the end of next year, but it won’t be comprehensive. Even if FAIR is able to come up with standards and a rigorous QA process, it will take more time for payers to develop and implement processes to ensure the data they provide FAIR meets those standards.
And you can bet your last hundred million that no payer is going to send data they aren’t absolutely sure is up to snuff.
What does this mean for you?
Good news, as the new UCR provider will help reduce payers’ exposure.
Health plans have a new vendor to work with – on the vendor’s terms.
Over the longer term, there’s another ‘outcome’ – Health data quality is about to go under the microscope, and the view may be pretty ugly. Healthplans and other payers may well have to upgrade their technology, training, and staffing to meet FAIR’s demands
Background
For those who don’t follow these things on a daily basis (hard to believe I know), some background. Years ago, the health insurance industry’s lobbying and service arm (HIAA) aggregated and compiled physician charge data as a service to its members. HIAA collected the data and fed it back to members, who then used the data to determine how much they should pay providers in specific areas for specific services (services defined by CPT codes). HIAA was taken over/disappeared about a decade ago, and Ingenix took over the aggregation and distribution of the data, which has become known as “UCR” for “Usual, Customary, and Reasonable”.
For about ten years, all was fine, at least as far as most insurers were concerned. Sure, physicians complained at times and consumers railed about the low reimbursement paid by companies citing their UCR, but the complaints didn’t really make any difference until Cuomo got involved. The problem arose when a few folks in New York complained about the amount they still owed providers after their insurers had paid their portion – according to Ingenix’ UCR. After a lengthy investigation, Cuomo found reason to charge UHC and other insurers, and that action ultimately resulted in this settlement.
Oct
30
Joe–
The view under the microscope is going to be very ugly indeed. Poor coding begins at the hospital or the doctor’s office and percolates up from there. Payors then add to the mess. Surgically clean UCR data will require improving the process from the ground up, starting with that recent high school graduate in the medical billing office. An audit of the medical bill coding at one carrier where I worked a while back showed that we had paid not one, but two chiropractors for performing complex brain surgeries. Of course, this was in California so just maybe….
I’m skeptical of any organization named with a self-referential acronym (the “F” in “FAIR” stands for “Fair”). At this point they should name the organization “Fair” rather than “FAIR” and then they won’t need to explain what “FAIR” stands for…
Joe, I hope that this new effort doesn’t make the mistake of collecting charge data, when it should be collecting paid data.
Charge data is fairly irrelevant; providers have every incentive to raise their “retail” charges, even as they accept considerably less from virtually all payers.
A meaningful UCR database, to be used to determine fair payment, should be aggregating and blending data relative to what providers actually get paid for services from the mix of payers in their locality ( including insurance carriers, HMOs and PPOs, Medicare,etc.)
Thanks Joe,
This is promising I will be curious to see how the data will balance between different parts of the country? Is the data aggregated based on what insurers pay or billed? I would be intereseted in your thoughts.
Jacob, I think we have to be careful focusing on the “paid” data because as more and more costs are shifted to the consumer that “paid” amount from insurers will get smaller, also that paid amount has had the plans terms applied to it and we don’t want that data to determine rates. What FAIR should be focused on is what insurers allow for payment; also know as the “allowed amount”. The allowed amounts are monies allotted for that particular CPT before deductible and co-insurance are applied or any other terms of plan for that matter (except the contractual obligation, of course).